Impact of health care law discussed Wednesday
Rules for health care insurance have changed for small-business owners and the Fairfield Area Chamber of Commerce provided an overview from two insurance brokers Wednesday evening.
“Now is the time to get acquainted with the new Affordable Care Act,” said Stephen Ringlee, founding director and chief financial officer of CoOpportunity Health.
Ringlee’s health insurance company, doing business in Nebraska and Iowa, is one of the companies offering coverage on the government health marketplace. He said the word “exchange” has already been replaced with “marketplace.” Ringlee traveled from Ames to present information to the community along with Alex Kessel, Fairfield insurance agent with Farm Bureau.
Ringlee said the important points to remember about the new health care law include:
• Guarantee issue and renewal coverage — no one can be denied coverage for medical reasons, meaning exclusion for pre-existing conditions is no longer lawful, and there are no lifetime limits.
• Individual mandate — tax penalties begin in 2014 for those without health insurance. The penalties increase to higher amounts each year.
• Subsidies are available for individuals and families with incomes below 400 percent of the Federal Poverty Level. Tax credits that are applied when purchasing health insurance on the marketplace at health care.gov to reduce premium prices and additional help with cost sharing are available to those with incomes less than 250 percent of the Federal Poverty Level.
Health care coverage can still be purchased elsewhere, but the subsidies are only available when buying through the marketplace provided on the government website.
• The government website provides a new way to shop and enroll for health care insurance — the individual marketplace and the small group marketplace, Small-business Health Options Program, also referred to as SHOP.
• Open enrollment periods for individual market — this initial year, enrollment began Oct. 1 and has been extended to March 31, 2014. Another enrollment period will be Oct. 15 through Dec. 7, 2014.
• Product standardization — individual and small group benefit designs comply with levels designated as bronze, silver, gold and platinum.
• As of Jan. 1, 2015, new rules and “play or pay” taxes for employer groups — rating factors limit age adjustment to a 3:1 ratio (the ratio of older people and young people in a plan); geographic areas; and tobacco use; fees and penalties for employers with 51-plus employees; and other fees to fund the marketplace.
“Even though this last one has been pushed back to 2015, it is still good to understand what this means and work with your broker regarding solutions by modeling various scenarios to enable you to come up with the best options for your company,” said Ringlee.
Small-business owners with 50 or fewer employees are not required to provide health insurance coverage. Employers with 51 or more employees are required to provide health care insurance.
Businesses with less than 25 employees can apply for tax credits, which phase out over 10 years.
Ringlee and Kessel recommended small-business owners go to the government website and review options and then contact an insurance agent or broker to guide them through the process.
“For time management reasons and to receive information you can trust, you really should partner with an insurance broker,” Ringlee told the dozen or so small-business owners attending. “We’re in active training to understand the new law and we specialize in insurance. You can do a lot of work on your own or get familiar enough with your options to talk with a broker.”
Because of tax credits and subsidies available to many, and it varies from case to case, Ringlee said not to look at the list price of a policy, but the net price.
Insurance plans’ network of providers — what clinics, hospitals, doctors, etc., are included in a plan’s network and which ones are out of network, will have differences more pronounced.
“Be sure to look at a plan’s in-network providers before making a choice,” said Ringlee.
Another change this law brings is co-pays, out-of-pocket expenses and deductibles paid by the insured all accumulate toward the annual maximum amount paid.
“This will be an economic benefit to families,” said Kessel.
People will get much better insurance starting in 2014, said Ringlee.
“Policies will be more comprehensive,” he said. “The various metal ratings — the bronze, silver, and so on, allow comparison of apples to apples, which has been very hard to do with current insurance policies.
“This will be consumer-engaged health care with more consumer incentives for healthy behavior,” said Ringlee. “Look for a growing focus on narrower networks, look for an emphasis on total cost and quality of care.”
The government website allows for looking at list prices of health care programs without putting in any personal information. Anyone can enter age, county and state of residence at the prompts and find premium costs before any tax credits or subsidies, at the various levels and offered by the companies operating on the marketplace.
“Iowa has approximately 15 plans on there now, and for small businesses, even going all the way through the process, entering specific information, you will get a message that after entering all your data, you will receive an email around Dec. 1 with your options for health coverage for your employees,” said Ringlee.
“Right now, you can buy health care insurance online or go through a broker,” he said. “You can provide coverage for employees and be eligible for tax credits for your business, or you can have your employees shop for their own coverage, but the business won’t get the tax credits.”
Businesses will be limited to a percentage of how much they can charge employees for providing health care insurance.
Flex plan benefits will be capped at $2,500 per year.
“Overall, the new health law is a good thing,” said Ringlee. “It’s going to provide better coverage in a more equitable way. Yes, younger people will pay higher premiums now and older people, mostly, will pay lower premiums. But when the younger people are in their 50s, they too, will benefit from the same ratio.”